This morning SAP announced the acquisition of one of its strategic partners TechniData, a Germany based company which provides a comprehensive set of sustainability services including process consulting, regulatory content, customized solutions, and implementation and managed services around SAP Environmental Health and Safety (EHS) application.
The announcement looks like the beginning of an answer to the question I asked in the latest blog post: Which strategy domains and roles will target an upcoming SAP strategy upgrade - growth targeting business executives or innovation targeting technical architects?
During the last three years, SAP has demonstrated strong commitment to the concept of sustainability. As software industry leader in the ERP market and in the Dow Jones Sustainability Index, the company is well positioned to leverage its insights, brand, and relationships into a source of competitive advantage. In particular the sustainability portfolio of solutions documented in the SAP sustainability library has the potential to become a major pillar of growth.
Besides being a go-to-market instrument, the SAP sustainability library is an excellent source of best practices for business process executives seeking to better understand sustainability. But for technical architects in search of product innovation visiting the library may be disappointing: its building blocks are based on SAP’s existing business suite and Business Objects platforms, with an exception being the on-demand Carbon Impact solution resulting from SAP’s 2009 acquisition of Clear Standards, Inc.
During Forrester’s most recent 2010 Global Business Process Improvement Online Survey of 141 companies we identified three types of organizations: a) organizations in which the process improvement team works separately from IT (to the extent they operate entirely independently); b) organizations where IT leads the improvement program and c) organizations where the process improvement team operates independently, but works closely with IT.
I have two questions to you:
Which of these three types is more mature from a governance point of view a, b, or c?
For the type you think to be most mature, who is responsible, accountable, contributing and informed (RACI) for making process improvement decisions?
We have a lot of discussions about the role of business process management (BPM) in enterprise management these days. I believe that BPM has no meaning without a variety of tools, such as process models, rules engines, activity monitors and business analytics. But I also think that BPM initiatives cannot succeed without deliberate governance. Formal governance ensures that BPM focuses on the sustainability of enterprise processes rather than application of individual technologies.
Visual management is of particular interest in this context, as the following example shows. You certainly remember Forrester’s Lean Business Technology maturity for BPM governance matrix. Transformed into as a multi-choice questionnaire the matrix becomes a powerful governance tool. Business process executives can use this tool to identify the constraints that hamper BPM in the enterprise and determine where to improve next and why. The following Figure illustrates the results of a real business assessment, where we used the matrix.
I recently completed an interview with the VP of patient management for a large healthcare organization. When introducing herself, she said that her responsiblity is “connecting the dots”. I asked her what kind of dots, and she said “We have a software application for everything we do -- I must get them talking to each other and this is a challenge.” I asked her what the role of IT. Her answer was “they do a good job of maintaining the applications, but not so much on cross-functional processes”.
Is this an unusual situation? Obviously not. A recent Forrester survey of 141 organizations shows that in 78% of organizations business executives -- not IT -- drive process improvement initiatives. I assume that most of these initiatives are about “connecting the dots”.
I think that IT decision-makers can do a lot more to improve business processes, in particular cross-functional processes. Acting as agents of process improvement, they need to re-focus their teams from supporting tech platforms to optimizing cross-functional processes. As one of these change-agents pointed out in a recent interview “ No single functional department owns end-to-end order-to-cash. IT can help a company see something that is hard to see”. (see this report)
Working with several IT decision-makers, I developed a few recommendations for change-agents who aim to increase the business orientation and efficiency of their organizations:
Focus on business enablement through service orientation
Our latest featured podcasts are Alex Peters' and Connie Moore's "Business Process Pros Hold the Key To Business Transformation".
In this two part podcast, BP&A Principal Analyst Alex Peters and BP&A Research Director Connie Moore discuss what Business Technology transformation is, who drives it inside the organization, and the role of the process pro in Business Technology transformations.
We look forward to your questions and comments.
Subscribe to Business Process & Applications podcasts through iTunes.
As a growing number of executives learn how to apply Toyota’s famous Lean principles and tools to improve quality and reduce costs, Toyota is making headlines. The Wall Street Journal recently reported that the company had to suspend sales of different models this week, and will halt production at their five North American factories next week, for quality reasons (see, this article for more).
The moral of the WSJ story is strikingly simple: Toyota was trying to get too big, and changed too fast. In doing this, its leaders obviously abandoned some of the principles of continuous improvement which made the Toyota brand and its Lean production system (TPS) so famous. These principles are about establishing a highly specified working environment based on mature norms to minimize quality-control variables. For example, never build a new product in a new factory with new workers.
Does this mean that Lean creates barriers to change? The answer is yes, and this is good news. Abiding by your Lean principles can protect your organization from moving too fast and making potentially unsustainable, even damaging changes. True business process transformation initiatives based on Lean focus not only on zero-defects and no-waste targets, but also look at how people work and interact to make processes and services flow. This means that for any change you plan, you will need also to allocate time and resources to build the organization and develop the skills that support the desired state of maturity.
Connie and I are now working on a document, describing these roles in more detail. We are discussing their evolution in relation with the process maturity level of the organizations in which they act. To help business executives recruit and develop the right kind of individuals for the emerging roles — stakeholders, change agents, gurus and prodigies — we have developed also two synthetic “high-potential” candidate profiles for these roles and give them a name:
Brian Porter - has 15-20+ years experience in business and IT; holds a senior position within the business process ranks; has deep knowledge of one or more core business processes; is a great communicator and big picture thinker; and of course is familiar with Forrester and uses Forrester Waves to make smart technology choices.
Many executives are hoping that the UN Conference in Copenhagen, currently in progress, will negotiate an international deal on carbon reductions this week, providing stable directions to governments and businesses about how to deal with climate change. I think that for industry leaders such an outcome would be very nice, but not essential. Most of these leaders — companies such as BMW, Nokia, Roche, or TNT — are already committed to manage for sustainability and:
Take actions to reduce carbon emissions. Leading organizations launch carbon reduction initiatives before being forced to do so, to reduce their own costs and boost operational efficiency.
Address environmental impacts strategically. Leading organizations integrate energy efficiency and carbon reduction initiatives into their overall strategies for preserving economic health in the long term.